News > July 2015

Fires are a significant fire hazard on construction sites. A November 2014 National Fire Prevention Association report found that between 2007 and 2011, U.S. fire departments responded to an average of 5,120 structure fires in residential properties that were either under construction or undergoing major renovation.

Each year, those fires led to an average of nine deaths, 94 injuries and $265 million in direct property damage. Firefighter deaths and injuries are not included in those statistics.

But proper planning and monitoring can improve your chances of completing a project without incident.

Project Planning

Before beginning a construction project:

Review the construction site, contemplating adjacent exposures that may affect the project

Look at how accessible the site would be for firefighters and their equipment

Develop a site-specific fire prevention plan, educating employees about what to do in case of fire

Establish a Hot Work Permit program that requires operations involving any sparks, open flames or heat-producing activities to follow safety protocols before, during or after work has been completed.

During Construction

Throughout construction, conduct thorough on-site inspections. Trained representatives of your project management team should inspect the site daily and retain all documentation. Inspections should include:

Active construction areas

Material storage areas, including special consideration for flammable items

Construction trailers and temporary structures

Site perimeter and adjavent property exposures

Mobile construction equipment storage areas

Additonal Considerations

All construction trailers, storage trailers and offices should be made of noncombustible material and be at least 50 feet away from the construction site an at least 30 feet from each other.

Fire department site access areas must be clearly identified, maintained an dunobstructed at all times. Access to fire hydrants or qualified water supplies for firefighting must be readily avaliable whether adjacent to or within the boundaries of the project site.

Store all combustible materials sagely and consider ordering them as needed to minimize the amount on hand. Spontaneous combustion of paint solvents, oily rags and similar materials discarded with trash can lead to a major loss.

Establish and strictly enforce a no smoking policy throughout the duration of the project.

Provide fire extinfuishers, rated not less than 2A, for each 3,000 square feet of the protected building area. The trafel distance from any point of the protected area to the nearest fire extingisher must not exceed 100 feet per Occupational Safety and Health Administraion standards. When there are multiple levels, OSHA requires an extinguisher be placed near the staircase on entry level.

Install and activate an automatic sprinkler system as soon as possible agter the building shell has been completed.

Collect all demolition and construction material as soon as possible. Removal of discarded materials should be done by a qualified disposal service on a regular basis- daily, if necessary- to eliminate accumulation of refuse. Position dumpsters away from buildings. Use metal containers with close-fitting lids for rags. Avoid burning any refuse, but if unavoidable, burn at lease 150 feet from buildings. Some jurisdictions prohibit open burning; remember to follow any local burning bans and observe any red-flag warnings in wildfire and forest fire areas.

Provide safe temporary heaters. Secure them on a solid base away from any woodwork and keep the floor free of all combustible material. Before leaving, be sure the heater is turned off.

Fire exposures are high and constantly changing throughout the course of construction. Key personnel on site must always know it's their responsibility to follow fire control procedures. Contractors have a responsibility to make sure that a fire control plan is specific, adequate and - most importantly- executed.

Thank you Camlyn Zanardelli, Marita Mathe, and Troy Dohmeyer at the Cincinnati Insurance Company for contributing the information contained in this article.

Losses that occur on property you own can affect your livelihood and that of your tenants. They also can affect your insurance rates and eligibility. Without the proper controls in place, you could be saddled with the responsibility of owing for injury or damages that you did not cause.

Recognize The Risks

When you understand the risks you face as a property owner and lessor, you can better manage them. Consider these scenarios:

Fire- A grease fire starts in a restaurant at one end of your building. Before it is extinguished, fire damages multiple units and tenant contents.

Third-perty injury or illness- a patron slips and falls in the parking lot, spraining her ankle.

Change in occupancy- a restaurant replaces a retail store in one fo your units. As a property owner, you want to determine if the current sprinkler system is able to handle the demands of a restaurant.

Change in tenant operations- A retail craft store expands its operations to include pottery making. With this expansion, your tenant adds kilns to heat-treat ceramis projects.

Vacancy- Your unoccupied building is vandalized, resulting in damaged property.

Review The Responsibilities

A well-designed lease agreement can assist owners in transferring responsibility for payment due to bodily injury or property damage to the legally responsible party. Consult with legal counsel when evaluating your current lease or other formal contract. When consulting with your attorney, consider whether your agreement:

authorizes you to develop, change and enforce rules and regulations for the premises.

defines which areas you control and which the tenant controls.

defines the maintenance obligations of all parties while specifying the scope of the operations and the steps you will take if the tenant defaults on these obligations.

grants you the right to inspect the leased premises for conformance with the lease provisions concerning meintenance and to point out the tenant any obvious hazards

requires the tenant to obtain permission before performing any building alterations

contains provisions regarding use of hazardous substances, dispensing of liquor, and other activities that increase the risk of loss

requires service contractors who come on your premises to provide certificates of insurance verifying adequate limits of insurance and appropriate state licenses, where applicable

requires tenants to obtain specified liability insurance on behalf of the owner, with you listed as an additional insured on a primary basis. Make sure you obtain proof that the tenant has acquired and amintians all required insurance.

Consult with legal counsel to familiarize yourself with state laws before you lease space to bars, restaurants or stores that sell liquor.

While it is your duty to live up to your obligations as a property owner, it is also wise to make your tenants take responsibility for their actions and premises upkeep.

Your local independent insurance agent is there to help you maneuver around the challenges you face as a property owner. Contact your agent whenever a new tenant moves into the building, a current tenant changes its operations or part of the building becomes vacant for 30 days.

Thank you Cincinnati Insurance Company and Kevin Oleckniche for contributing this information.

Ongoing patterns of severe weather mean homeowners and business owners have experienced everything from record snowfalls and tornadoes to recurring storms with wind, hail, and record amounts of rainfall- all leading to a record numberof flooded homes and businesses.

Water claims under personal or business insurance contracts can be confusing and easily misunderstood, and standard insurance does not cover everything.

The most common water damage claims result from surface water, sewer backup, ice and snow melt or hydrostatic water pressure.

Whether you have a personal or business claim, the cause of loss is first determined and then your coverage is reviewed.

Most insurance companies' standard personal and business policies exclude coverage for surface water that damages the property. You and your agent should be aware of whether or not your insured property is located in a designated flood zone. If so, you can purchase insurance from the National Flood Insurance Program.

The other causes of loss listed can be covered by purchasing endorsements to add coverage beyond what a standard policy includes. These endorsements may limit coverage to a specified dollar amount, but recovering even a portion of the damages could make a big difference to the financial health of you family or business.

Under a personal insurance policy, amendatory endorsements can provide limited coverage for sewer backup, overflow of drains and sumps and hydrostatic water pressure for limited amounts, commensurate with the amount of coverage you purchased on the base policy. Your independent agent can help you make the right choices for your individual needs.

Business owners can purchase endorsements to add coverage for exposures such as sewer backup, hydrostatic water pressure and interior building damage from rain, sand or dust without damage to the roof or walls. Some endorsements adding coverage for water damage may include coverage for loss of business income and extra expense you incur as a result of a covered loss caused by water damage.

This blog is a short summary of potential endorsements to the personal and business insurance policies and is not intended to be a comprehensive policy coverage review. Remember that different insurance companies may handle these coverages differently. In the event of a claim, please consult your actual policy contract.

Thank you Michael Sullivan and the Cincinnati Insurance Companies for contributing this information.

You have decided to build or remodel your home or busienss. This is a big step, both financially and emotionally. Choosing the right contractor to complete this project is also a big decision.

Hiring the wrong contractor can lead to cost overruns, delays, substandard work and sometimes even litigation over disputes regarding the timing, quality, or cost of the project. While it's tempting to choose a contractor based solely on an online portfolio of completed work or customer testimonials, don't overlook the importance of making sure your contractor is properly licensed to perform the project as well as adequately bonded and insured.

Licensed

Certain types of contractors may be required to hold a state or local license demonstrating that they meet minimum training or experience requrements. Thest types of contractors generally include electrical, HVAC, and plumbing and refrigeration contractors, but this may vary by state. In many states, and even individual municipalities, contractors must be bonded to be eligible to be licensed.

General contractors taking on jobs involving any usually licensed trades, as listed above, generally should be licensed themselves. Don't be afraid to ask a contractor for their license number. Steer clear of contractors who lack licensing required in your state or locality. If your construction work is the result of an insurance claim, your agent may be able to advise you, or check with your attorney to resolve any licensing issues.

You can use a contractor's license number to check with state or municipality about any complaints filed against that contractor. Some states provide a website to check licensing for some trades. You can also check with your local Better Business Bureau for its rating of particular contractor.

Hiring a licensed contractor does not guarantee all will go smoothly with your project. Even licensed contractors can run into problems, therefore it is important to check that your contractor is bonded and insured.

Bonded And Insured

These terms are similar, but not the same. A bonded contractor has secured financial backing- sometimes called a performance bond or contract bond- from a bonding company or insurer that will provide funds to pay the consumer if the contractor doesn't perform as required. Performance bonds protect property owners against problems not covered by the contractor's insurance.

For example, if the contractor should fail to complete the project (because of bankruptcy, death, or just walks away mid-project, etc.) a performance bond may provide funds to complete the project. This is important if you need to hire another contractor to complete your project. Ask your contractor for a copy of the performance bond.

Make sure any contractor you haire is also insured with both commercial general liability and workers' compensation insurance. The contractor's liability coverage protects you from bodily injury or property damage or losses caused by contractor negligence or negligence by their employee or sub-contractor.

Their workers' compensation coverage protects you if an employee of the contractor is injured while working on your property. Ask for the contractor's certificates of both their liability and workers' compensation insurance if they are not supplied to you along with the bid. A certificate of insurance is a summary provided but the contractor's insurance company showing the policy numbers and listing the coverages that are in place and the time period covered.

Asking questions before you hire a contractor can protect you from the financial consequesnces of a poorly run project. It's also a good idea to consult with your attorney before signing contracts and to ask your local independent insurance agent to review your insurance coverage and the certificates provided by the contractor to make sure you are adequately protected.

Thank you John Fisher and The Cincinnati Insurance Companies for contributing this information.

If you want to restore the comforts of your home in the event of a loss, it's best to choose replacement cost coverage on your household contents. It could be worth hundreds, even thousands of dollars to your family.

Most homeowners insurance policies cover personal property for its actual cash value. to cover your contents for the cost to replace them- new for old- request replacement cost contents coverage.

WHAT IS ACTUAL CASH VALUE?

Actual cash value is replacement cost minus reasonable depreciation. The actual cash value of your household property is what the items are worth at the time of a loss. For example, a television set usually lasts about 10 years. If you owna 5-year-old TV, about half of its life is used up. While you would pay $800 to replace it with a new one, its actual cash value is around $400. Homeowners insurance usually pays actual cash value (after the deductible) for your damaged or stolen TV.

REPLACEMENT COST CONTENTS COVERAGE IS AVALIABLE

With replacement cost contents coverage, no deduction is made for depreciation. Your homeowners insurance pays the full replacement cost of a new item of the same kind and quality, minus the policy deductible. Most policies require that you actually replace the item before replacement cost is paid.

Ask your local independent agent about replacement cost contents coverage. it lets you recover costs up to the full amount of your contents insurance limit. For example, your 10-year-old TV has an actual cash value of $100, but it would cost $800 to replace it with a new one. With replacement cost contents coverage, you could receive the full $800 for the new TV, subject to policy conditions, deductible, and content limits.

This coverage would NOT apply to rare or antique items, those with sentimental value, or items unsured under special limits of liability.

Talk to your local agant to learn about options to insure your comforts of home at appropriate values.

Thank you Cincinnati Personal Lines for contributing the information in this article.